5 Apr 2019 18:04

Russian Energy Ministry expects decisions to offset budget shortfall from fuel among mechanism changes soon

MOSCOW. April 5 (Interfax) - Decisions on compensating any budget revenue shortfall from changes to the damping mechanism for fuel will be reached soon, Russian Energy Minister Alexander Novak told reporters.

"A decision will be reached soon. The Energy Ministry and Finance Ministry still have to finalize [the proposals], we'll be discussing and working with figures this very day," he said.

Sources told Interfax earlier that the Energy Ministry and Finance Ministry had not yet been able to agree on how to compensate the budget for revenue lost from adjusting the damping excise on oil.

The Finance Ministry estimates this will result in 120 billion-190 billion rubles of lost revenue.

One of the compensation options could be an increase in mineral extraction tax (MET). However, the Energy Ministry is against this kind of approach. Another compensation option could be National Wealth Fund (NWF) monies, a measure which is opposed by the Finance Ministry. Russian Energy Minister Alexander Novak said that a proposal on partial compensation via an increased duty on medium distillates is currently being elaborated upon.